The diversification of individual risks, which increases expected risk-adjusted returns, is like apple pie, motherhood and the flag. It is so ingrained in the minds of managers and their clients that this aspect of portfolio theory has remained unchallenged during a period of exceptional creativity in the investment industry.
read more Insights by Stuart FowlerWhose performance is it anyway? When clients’ portfolios are genuinely customised to personal goals whose terms of reference they have jointly planned and taken responsibility for, it is reasonable to answer questions about performance with a question of our own. Yet the question posed is also a matter of fact we ought to be able to answer. In this article we provide the answer together with some guidance as to what, if anything, it means.
read more Insights by Stuart FowlerThere is not much in personal finance as emotionally charged as losing confidence in banks. This article brings together the various postings on the No Monkey Business blog at different stages of the banking crisis. Their purpose has been to be factual and rational, as a complement to instinct and habit and a counter to naked fear. As the crisis evolved, we have found ourselves changing our advice at different stages and adapting it to different people in different ways, but still rationally.
read more Insights by Stuart FowlerOn traditional valuation measures, shares have remained quite highly valued and even after the most recent falls, taking into account lower earnings estimates, they are still not unusually cheap. We think this explains much of the weakness of equity markets, quite apart from the particular problems of financials, and also reduces the scope for sustained recovery from these levels.
read more Insights by Stuart FowlerA key feature of the No Monkey Business investment approach, horizon matching, has been critical to protecting clients against adverse consequences of a bear market. Failure to match investment risks to time horizons for the money creates a linkage between investment portfolios and household cash flows that can and should be avoided.
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